EASY AS ONE

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Bachelor thesis, 15 Credits

International Business Program, 180 Credits Department of Business Administration

Autumn term 2020 Supervisor: Ulrika Leijerholt

EASY AS ONE

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TWO

-THREE?

A qualitative study on three

factors that affect sustainability

in

heavy industry organizations

Molly Stocksén & Sandra Wexén

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Abstract

Leadership, innovation and culture are three aspects identified by previous research to have an impact on the organization's sustainability work. Sustainability work is something that today almost all organizations engage in, in order to both survive long term but also to limit their impacts on the planet and the humans living there.

Sustainability work as defined in this thesis to consist of three parts which are economic sustainability, environmental sustainability and social sustainability. In order to perform successful work, all parts must be included.

This thesis is investigating what role leadership, innovation and culture have in organizations' sustainability work, with a focus on Swedish organizations within the heavy industry. To do this the thesis is using previously presented theories in

combination with eight semi-structured interviews. The interviews are performed with sustainability managers and advisors operating within the Swedish heavy industry. The result of this thesis is presented using a thematic analysis where 11 themes are identified and presented. These themes are furthermore analyzed and connected to the theory with the aim to answer the research question.

The purpose of the thesis is furthermore to create a deeper understanding and knowledge about these factors and their role in organizational sustainability work. The goal of providing a deeper understanding and knowledge is that it will lead to more successful sustainability work.

The conclusion of this thesis is the identified themes that could be connected to all three factors, leadership, innovation and culture. These themes were found to play an

important role in organizational sustainability work. It is important for Swedish organizations within the heavy industry to be aware of the factors and themes are well as knowing how to handle them, in order to reach successful sustainability work. In the conclusion of this thesis, there is also provided a few practical

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Acknowledgements

The authors of this thesis would like to express their sincerest thank you to their supervisor Ulrika Leijerholt for her time supporting and advising throughout the writing

process.

The authors would also like to thank Axel & Tova for their constant support and valuable discussions throughout the process. Without them, the writing of this thesis

would not have been remotely as fun, or easy.

In addition, the authors would like to thank all the respondents that participated in the interviews. Without them, this research would not have been possible to conduct. Despite the stress that the current pandemic brought, they contributed their valuable time for the purpose of this study. For this, the authors want to express their sincerest

gratitude. 2021-01-05 Umeå University

Molly Stocksén

Sandra Wexén Molly Stocksén Sandra Wexén

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List of figures

Figure 1. The interview process ... 22

Figure 2. Thematic analysis process ... 26

Figure 3. Literature search process ... 27

Figure 4. Our identified themes ... 56

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1. Introduction

This chapter will introduce a problem background, as well as describe the research gap for this study. The research question is introduced along with the purpose of this study, to provide a basis for further reading of the paper. The practical limitations of the study are also presented.

1.1 Problem Background

Social and economic globalization are shaping our modern societies and the world has a constant rise in total GDP which claims a higher extraction of materials from nature. The global human populations also continue to rise, and WWF (2020) reports that we are overusing the earth's biocapacity with 56%. We are using too much of the resources available, and we need to evaluate our lifestyle. This is also true for organizations, as they are a substantial user of resources. The world is however getting more and more aware of the need for sustainable solutions, and when both customers and the

government are putting pressure on organizations they need to deliver. Even since sustainability are a relatively new and growing area of interest (Matcalf & Benn, 2013, p. 1), almost every company today engage in sustainability in some way, both for their profit but also for the survival of our planet (Matcalf & Benn, 2013, p. 2).

Sustainability can be defined in different aspects, that all should be incorporated into the organization to fully be sustainable. The different areas considered in this study are social, economic, and environmental responsibility, also referred to as the Triple bottom line (Gimenez et al., 2012, p.150) The work with these different factors is what we will refer to as sustainability work, the gathered efforts to perform better in these areas of development. Organizations have previously been the focus of the sustainability debate, due to their possession of resources, technology, and possible motivation to work towards creating more sustainable societies (Orji, 2018). The organizational

sustainability work may therefore be a key factor in improving our overall sustainable performance. This makes organizations a relevant topic to investigate and developing their sustainability work should be a relevant topic not only to themselves but to us as a society.

Many characteristics of sustainability are industry-specific, and it may therefore be hard to make general assumptions about sustainability work in organizations if they are working in highly different industries (Orji, 2018, p. 103). This is one of the reasons why this thesis will aim to be heavy industry-focused, by solely investigating heavy industry organizations that operate in Sweden, general assumptions will be more valid. We have in this thesis specified the definition of heavy industry companies to be companies operating within the handling and transformation of natural resources. However, the specific organizations, interviewees, and industry will remain anonymous.

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modern world (Karakaya et al., 2018, p.5). And even if the Swedish industry has undertaken a few major implementations of changes and shifts it is not a common activity that they are used to (Karakaya et al., 2018, p.5). These reasons make Swedish organizations within the heavy industry a relevant topic to provide further, and updated research on. This to accommodate the rapid changes of their branch. The challenges that they face like an old industry adapting to the modern, sustainable society are not only relevant to for their financial survival, but to the overall sustainability development. By analyzing three factors and what role they are given in their organizations, this industry will be assisted by a deeper understanding of their current and future sustainability work. This could accommodate future development of the work with these factors as well as a deeper knowledge. A qualitative method was chosen for this, as this allows for in-depth and socio-contextual analysis, which is suited for the identified research problem. This method allows for detailed analysis as well as incorporating interpretations from interviewees in order to gain knowledge about the subject (Vaismoradi et al, 2016, p.100). A qualitative method can therefore best serve the purpose of this study.

The organization's sustainability work will be affected by several factors (Engert & Baumgartner, 2016, p.824). Since this is a Bachelor thesis with some limitations presented further down in this chapter, the authors decided to narrow the scope of the study and the research problem to investigating three factors that affect sustainability work in organizations. These factors are leadership, innovation, and culture, and the aim is to find what role they are given as part of the sustainability work. Innovation, culture and leadership are all stated needing to be a part of an organization's sustainability work if it should be successful (Engert & Baumgartner, 2016; Melville 2010).

These factors have been chosen among several other factors that influence sustainability work. The specific choice was partly taken because of the previous research gap on these specific factors connected to Swedish organizations within the heavy industry. Furthermore, these factors have been previously connected to sustainability work which makes them relevant to investigate. These three factors have also in previous research been investigated together, as well as the relationship between them. For example, von Stamm (2009) researched how leadership may influence a culture that encourages innovation. While Apekey et al. (2011) investigated leadership and the correlation to a culture of innovation and found a positive relationship. The fact that previous research has found a correlation between them provides grounds to include all three in this study. We therefore deduct that these three factors investigated together can create a

comprehensive knowledge of the organization's sustainability work. Leadership, innovation and culture are relevant individually, while relevant collectively. This motivates the choice of factors related to sustainability work in Swedish organizations, within the heavy industry.

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industry developing their sustainability work to adapt to a rapidly changing environment.

1.2 Research gap

As part of establishing a research question and commencing the writing of this thesis, previous research was scanned and reviewed. When looking into the different factors that affected sustainability work in organizations, useful information emerged on the topic of leadership, innovation and culture. Engert & Baumgartner (2016) stated how culture and leadership are two important factors to consider when organizations work with sustainability and wish to be successful in their work. Additionally, Melville (2010) argued for the importance of innovation for an organization to both be and stay sustainable. We concluded to investigate what role these three factors have on the organizational sustainability work. Since future research has already stated that these three factors are important for the sustainability work, we will rather look at what role they have, and specifically Swedish organizations within the heavy industry.

Many factors that previously have been investigated have a heavy focus on the

profitability of sustainability as a driver for organizational change towards sustainable operations, which of course is of great importance for profit-driven organizations (Bini et al., 2018, p. 1168; Bodhanwala & Bodhanwala, 2018, p. 1744). However, in this study, we will investigate other internal factors that can impact the organization's sustainability work. Previous research finds the factors of leadership, innovation and culture to also be linked to sustainability in different ways. This is found by, for example, Engert & Baumgartner (2016), Melville (2010) Heizmann & Lui (2018), and Sledzik (2015).

Elenov & Manev's (2005) study presents their suggestion for further research;

investigating leadership in a sociocultural setting to find effective leadership factors that influence innovation. This was one of the inspirations for our investigation of

sustainable leadership in a specific country and industry, and to incorporate the cultural setting of the organization. Additionally, Engert & Baumgartner (2015) presents a study that is specified in the automotive sector, and which goes into factors that create a gap between formulating and implementing sustainable strategies Among the identified, leadership and culture could be found. They present suggestions for further studies, a similar study in other sectors that could be used for comparison. Even though this thesis is not meant to be used as a direct comparison to Engert & Baumgartners (2015), this inspired the choice of subject and motivated us to look into different factors that affect sustainability work in organizations, however, focused on another industry as they suggested.

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of Swedish organizations within the heavy industry. Our contribution to the literature therefore provides deeper knowledge on sustainability work in organizations in this industry. It further creates knowledge that could be applied and compared to other industries to analyze their leadership, innovation and culture related to sustainability work. This research gap then leads us to the research question and the defined purpose of this thesis.

1.3 Research question

What role does leadership, innovation and culture have in the sustainability work for Swedish heavy industry organizations?

1.4 Purpose

As previously mentioned, previous research has linked leadership, innovation and culture to sustainability work within organizations. The purpose of this study is therefore to create a deeper understanding of these factors within a specific

demarcation, Swedish organizations operating within the heavy industry sector. We will investigate what role the factors of innovation, leadership and culture have as a part of the sustainability work within organizations within our chosen branch. This includes heavy industry organizations, operating within the handling and transformation of natural resources.

By identifying the role of these factors, we aim to create an increased understanding of these factors as part of their sustainability work. This will help them move their

sustainability work forward by addressing the findings. A deeper understanding enables reflections upon their strategies, operations, known and unknown cultural patterns to name a few. By looking at the role of these factors, it will allow for reflection on what role these factors might undertake instead, as a part of improving the sustainability work. It will create an understanding on how these factors are- or are not used as tools for the sustainability work of the organization. The theoretical framework of this thesis will provide a background on these factors and how they have been previously linked to sustainability work. This theoretical framework assists our purpose in creating a deeper understanding of the subject.

Through this research, we aim to create an understanding of how the internal factors can affect an organization, to develop knowledge on what affects an organization's ability and ambition to engage in sustainable activities. Through this, we hope to contribute to the development of sustainability work in organizations. Furthermore, the aim is to increase sustainability from a societal perspective.

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provide valuable information for students interesting in working within the branch of either sustainability or the Swedish industry, in order to learn and understand the roles better.

1.5 Practical limitations

Since this is a part of our Bachelor thesis course, we have a limited time to finish this research. This course is 15 HP which is equal to 10 weeks, and that is also the time we have available to finish this research. This creates limitations in both sizes of collected literature and interviews. When it comes to interviews this gives us limitations on both how many interviews, we have time to perform, but also how long each interview can be. However, this also creates the pressure to limit our research but still make it

relevant. Additionally, this research has limitations when it comes to funding, we do not have a budget to perform this thesis. Therefore, travels cannot be afforded as well as paying for material or literature. Due to this, we will stay in Umeå during the whole thesis work and only use literature from free sources and the sources provided by the university.

Furthermore, the on-going pandemic with covid-19 and its regulations comes with limitations to our research. This takes away the possibility to meet with our

interviewees in real life. Instead, we must perform our interviewees using technology which makes it possible for each person to stay safe while participating. This also comes with the advantage that we do not have to limit our interviewees to people living in a close area to Umeå. Instead, we can now include interview participants from all over Sweden.

1.6 Thesis outline

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2. Theory

This chapter will introduce previous theoretical findings in the subject we are investigating. Specifically, this includes the factors of leadership, innovation and culture. We introduce the concept of Triple bottom line in organizations and then go further into each factor and present previous findings that are relevant for this study

2.1 Triple bottom line

Being able to discuss and research sustainability we first need to define and describe the term. Therefore, we will here present an explanation of sustainability and the concept of the Triple bottom line. Sustainability is defined by Kleindorfer et al., (2005, p. 484) as to how we can handle today's need without compromising the consumption and needs of future generations or future times. And for different companies, this term can have different meanings and levels of importance (Gimenez et al.,2012, p. 150).

To increase understanding and to make it easier to apply sustainability is can be divided into three different subcategories, social, economic and environmental sustainability (Gimenez et al., 2012, p. 150). These categories are based on Elkington (1998) and his presentation of the Triple Bottom Line model. In the model, the three dimensions of performance are measured, social, economic, and environmental. These also can be translated to people, planet and profit, and are then referred to as the 3Ps in some cited research (Slaper, 2011, p 1). But in this thesis, they will be referred to as the Triple bottom line. Environmental sustainability is defined as maintaining natural resources and capital (Goodland, 1995, p. 10). Which means all resources that are natural on the earth and that we have a limited amount of (Goodland, 1995, p. 14). Examples of resources like that are the ocean, soil, rocks, forest, oil, coal and metals. This part of sustainability was the first one addressed (Gimenez et al., 2012, p. 2) and is in many people's perspectives seen as the most important aspect for Swedish organizations within the heavy industry.

Economic sustainability refers to costs such as production and manufacturing costs (Gimenez et al., 2012 p. 2). This part also includes that the company is making money for itself and can stay profitable in the long run. Having economic sustainability refers to having costs as low as possible, together with stable incomes to survive (Gimenez et al., 2012 p. 3). Social sustainability refers to the focus of both internal communications such as employees and external communications such as the production chain. The target is to encourage diversity, ensure the life-quality of workers, decrease illness and sick days, and provide an accountable governance structure. These factors are

sometimes known as the “soft” parts of sustainability (Gimenez et al., 2012, p. 2). The goal is, by using the triple bottom line, that companies should engage in social and environmental sustainability and by that make financial gains within the process and by that acting economically sustainable (Gimenez et al., 2012, p. 2).

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In this research, we decided to use the Triple bottom line model and to view

sustainability in three categories with the aim to make the wide concept of sustainability easier to understand. Since this model was founded by Elkington (1998) it has been used as a building block for research more present in time and with more modern approaches (Scott & O’Brien, 2003; Seuring & Muller, 2008; and Boxall & Purcell, 2011).

2.1.2 Profitability of sustainability

Sneirson (2014, p.989-990) presents the issue that sustainability in business practices can entail a sacrifice of profit and that this conflicts with the assumed goal of profit-driven organizations. These commonly assumed goals are that corporate directors must strive to maximize the profit and wealth of shareholders, and therefore this means that they therefore neglect other issues that may be important but that don´t contribute to increasing that profit. This conflict is presented as a great obstacle to sustainability in organizations (Sneirson, 2014, p.989-990). However, this obstacle can be overcome, and sustainability can become a reconciled part of the business strategy of

organizations. Sneirson (2020, p. 1017) presents how a paradigm of companies has committed to sustainable business practices and incorporated this as a part of their organizational identity. Other previous research further points to that including sustainability and CSR matters can be a source of competitive advantage and ensure long-term success in an organization. (Bodhanwala & Bodhanwala, 2018, p. 1744). The profitability of sustainability and investment in such initiatives will be of great interest to the organizations, and an important factor in demanding how much space it is given within their operations and processes. The profitability of sustainability is highly related to the economic factor of the Triple bottom line model, and therefore a part of the organizational sustainability work.

2.2 Leadership

Hogan & Kaiser (2005) defined leadership as the solver of the problem of how to organize collective efforts and is therefore responsible for organizational effectiveness. Great leadership can seamlessly coordinate activities and employees and organizations into a state of prosperity, while bad leadership is such that hinders or fail to organize those collective activities (Hogan & Kaiser, 2005, p. 169). That leadership has the ability to affect the success of the organizations has been found by several authors, this is explained by for example Hogan & Kaiser (2005, p.170) as well as Ogbonna & Harris (2000).Hogan & Kaiser (2005) also indicates that leadership can be highly connected to the well-being and performance of individuals as well as the effective performance of teams. This means that the leader has both responsibility and

opportunity to influence the organization in the right direction. What the right direction is can be dependent upon the goals that the organization has set up for themselves and the tasks that they must perform. This is therefore a highly relevant subject regarding the company’s sustainability work.

Leadership is a tool that is very adaptive and can therefore be a key to ensuring

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activities and leadership also further provide a good argument for why leadership is a factor to be considered and evaluated in this study, and subsequently by the

organizations themselves. Since it has been linked as a driver of sustainable activities, we want to investigate how the firms use this tool and what role it is given as a part of reaching the organizational sustainability goals. This leads us to one part of the research questions, what role leadership has as part of the organizational sustainability work. Sustainability leadership is one of the factors of increased interest in organizations, due to the heightened sensitivity to ecological concerns. Sustainability leadership can include several factors however broadly it includes the leadership measures, through behavior and attributes, towards promoting change that eventually creates

environmentally sustainable operations and practices within the organization (Heizmann & Lui, 2018, p. 40). To analyze sustainable leadership, the leader’s key competencies and skills can be identified to find how their cognitive abilities contribute to creating sustainability focus on the organization and in their department. Some characteristics that have been identified as useful are, for example, systemic thinking, the ability to include several perspectives and emotional intelligence as tools to approach problems of great complexity. This as well as the ability and sufficient intelligence to navigate the organization and the employees through uncertainty are also important aspects, as sustainability work can be connected to uncertain situations, such as trying new operational routines and innovations (Heizmann & Lui, 2018, p. 41-42).

The self-benefit of sustainable operations refers to how leaders ask themselves; “what is

in it for us” before engaging in sustainability proactivity. Their internal motives are a

driver of sustainable activities for an organization and it is therefore essential that the leader has knowledge on how to work strategically with sustainability, to incorporate it into their business (Broman et al., 2017, p.4) Perceived value creation of implemented sustainability strategies as well as the impact of said initiatives on an organization level was also found to be linked to sustainable operations according to Eide at al. (2020). The leader’s knowledge of why they should engage in sustainability helps them create a strategic framing of the subject and how it can work as a part of their profit-model. By communicating both the global environmental challenge and self-benefit of

sustainability the leader could create acceptance of the transformation, leading to a shared vision. However, it is also important to consider how this can be practically implemented, as this is a key to creating engagement and enthusiasm throughout the organization. Extensive competence in the subject on how to practically execute sustainable solutions will create a mutually re-enforcing challenge where they work together towards hands-on solutions and a sustainable transformation (Broman et al., 2017, p.5). The knowledge available in the organization and their leaders is therefore an aspect to consider when positioning the role of leadership as part of the sustainability work. We therefore aim to find out whether this knowledge exists and whether there are available sources and support for the acquisition of knowledge related to sustainability. This can then give a clue to how the organization performs.

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investigate when further analyzing sustainable development (Broman et al., 2017, p.5). Education can affect a leader in different ways, not only the level of education and direction of studies but also on the specific university’s climate initiatives and

leadership philosophy. For example, the way sustainability and ethical perspectives are communicated and taught to business students can help shape their values. This means that it can affect leaders' sustainable choices later in their careers (Broman et al., 2017, p.6). This is an example of how the individual leader can influence the outcome in organizations, and how the right competencies and background can make the difference in incorporating sustainable strategies.

Through the history of research, there are different leadership styles connected to sustainability information management. One approach includes leaders that strive for ambiguity rather than clarity, as well as a short-term focus and deviance from traditional linear change processes. This is referred to as the sociological concept of robust action (Broman et al., 2017, p.7) and seems to encourage leaders that have a very hands-on approach and result oriented in their sustainability management. According to a recent study by Eide et al., (2020) the individual leadership style and ability to motivate

employees could help sustainable activities since it can enhance the personal motivation of each employee to value and focus on such activities. These findings by Eide are confirmed by Ogbonna & Harris (2000), as well as by Metcalf & Benn (2013) to name a few. The recency of these studies confirms that these leadership theories hold up and appear accurate with today's organizational climate.

Top managers and leader’s personal inclination towards sustainability matters will likely include it as a part of the overall firm strategy. These kinds of leaders can more successfully express personal motivation and can include sustainability as an integrated part of the operations (Eide et al., 2020, p.2, Metcalf & Benn, 2013, p.377). An example of a very utilized leadership style is transformational leadership, which is characterized by charisma and motivational techniques that energizes and grants the employees a sense of purpose. These types of leaders have also been connected to organizational performance (Eide et al., 2020, p.2; Metcalf & Benn, 2013, p.374; Ogbonna & Harris, 2000, p.768).

Transformational leadership will usually be less likely to accept current ways of doing things and will continue to challenge the status quo. Transformational leaders are therefore likely to be more suitable for sustainable leadership since it involves entering untapped competitive environments and uncertainty in many industries.

Transformational leaders are also assumed to have a greater impact on employee motivation, which as previously explained may have a direct effect on sustainability matters if these are communicated. They are also known to enhance the creativity and intellectual stimulation of the employees which can help them challenge old ways and come up with more efficient solutions (Eide et al., 2020, p.2). This is therefore a tool and a role that could be assigned leaders in an organization that is going through change, such as heavy industry organizations in Sweden.

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organization (Eide et al., 2020, p.8). The leadership styles and general approach from the management regarding sustainability work is therefore relevant to consider. Research by for example Bini et al. (2018) and Quinn & Dalton (2009) further suggests the meaning of good communication both internally and externally. Consistent and emphasized communication from leaders can strengthen sustainability work, along with constant education of employees (Bini et al., 2018, p.1164; Quinn & Dalton,

2009, p.31). Communication has been found as one of the most important tasks for a leader and plays a key role specifically related to sustainability. Also, that a

communicative leader, meaning a leader with good communicative skills, have better opportunities to engage their employees and co-workers and build rewarding

relationships with them (Bini et al., 2018, p.1164).

Communication and effective business disclosures have been found necessary to embed sustainability into the organization in an effective way. Further relevant research on organizations in closely related industries has previously found the need to

communicate their sustainable objectives directly to the public in strategic ways (Bini et al., 2018, p.1162). This creates insight into the logic that lies behind strategic and value processes in their sustainability work. One example of this type of communication could be through transparent sustainability reporting, formal newsletters, or websites (Bini et al., 2018, p.1162; Quinn & Dalton, 2009, p. 31).

In the Globe study presented by Chhokar et al., (2008 p.51) employees got to rank their favorite personal attributes on leaders based on the Swedish culture. The result was that Swedes do like their leaders to be inspirational, visionary, collaborative, team orientated and show integrity. While attributes such as self-centered, malevolent, autocratic and non-participative were ranked at the very bottom of the list of wished characteristics of leaders. This result specific to Sweden also turned out to match the global result closely, which means that the Swedish preferred leader attributes are like worldwide preferred leader attributes.

2.3 Innovation

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The concept of innovation was one of the first times presented by Schumpeter in the early 1900s. (Sledzik, 2015, p. 89) and were defined as “new combinations” handed out by entrepreneurs. He divided innovations into five types in his book Theory of

Economic Development (Sledzik, 2015, p. 89). The 5 types are presented below.

1. launch of a new product or a new species of an already known product 2. application of new methods of production or sales of a product

3. opening of a new market (the market for which a branch of the industry was not yet represented)

4. acquiring new sources of supply of raw material or semi-finished goods 5. new industry structure such as the creation or destruction of a monopoly position. Along with these categories also Mota (2014, p. 3) describes innovation as a combination, of either discovery or invention. In the later part of the century newer research (Deutsch et al. 1986; Mulgan et al. 2007) added on the category of social innovation meaning advances in social sciences along with policies and solutions for our social needs. Because of this, innovation is today a wide concept used in different aspects and under constant development.

Schumpeter already in the early 1900s argued that anyone seeking profits, in the long run, must be innovative (Sledzik, 2015, p. 89). Since times have changed since the early 1900’s today's business is not just only about seeking profits, but also about acting sustainable both to keep the planet alive and benefit their own business (Seebode et al. 2012, p. 195). Therefore, more recent in time Mota & Oliveira (2014, p.2) is discussing that we are today facing two important challenges that relate to each other, innovation and sustainability. To combine these two challenges organizations need to

simultaneously work with them to find beneficial solutions. (Mota & Oliveira, 2014, p.4). If we combine Schumpeter's idea about innovation being the need for profit, with Mota & Oliveira (2014) ‘s the opinion where innovation is a need for sustainability, we can conclude that companies working with innovation in the correct direction can both be rewarded with a sustainable business as well as profit or even additional profit for the organization. This takes us back to the Triple bottom line where Elkington (1998) created the model where companies should focus on their financial, social, and

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Today there is plenty of discussions about the need for innovation, and it is very little stated how the process of a more sustainable world thanks to innovation will be managed (Seebode et al. 2012, p. 196). Sustainable-orientated innovation is a concept used by Adams et al. (2016) where they present a model that companies can use to search the level of innovation where it can help the company to be more sustainable. The first step addressed in the model is to develop an initial architecture, which goes in line with Cai et al. (2018) where he described that leaders must foster an entrepreneurial architecture. Here the leader must develop an architecture that goes in line with their idea about sustainability. The next step in this model is a systematic review of

SOI which is meant for leaders and employees to collect information about the subject

and learn from it. The right knowledge is needed to manage a change towards a more sustainable solution. The last step described is the framework synthesis where the company should adopt the developed framework on their business in order to advance themselves and their approach (Seebode et al. 2012, p. 196).

Incorporating sustainability thinking has previously been largely connected to product and service innovation, and it is important for management to consider the sustainability of their product development activities. This includes the early estimation of the product lifecycle and other strains on sustainability and incorporating this analysis into the early phases of innovations processes (Broman et al., 2017, p.7). This creates pressures for organizations to know appropriate frameworks and analysis methods to estimate the sustainability effect of what they are producing.

Another aspect that can improve sustainability through innovation is the cooperation between several value-chains and other stakeholders in their product development processes, for example, financial institutions and politicians. According to Överholm (2016), this then allows for several perspectives on the development and can move focus solely from the product itself to the functionality and consequences of creating the product. This can then increase the sustainability perspective of this process (Överholm, 2016, p.296). Furthermore, innovation is complex, and often involved dealing with a bundle of knowledge brought together into a configuration, as well as working in

different dimensions (Seebode et al. 2012, p. 198). In order to reconstruct an established organization's innovation approach, there will be a need for both a long-term vision as well as a strategic framework to navigate and control the process (Seebode et al. 2012, p. 198).

2.4 Culture

Culture is described according to Dingil et al., (2019, p.1) as common preferences for a group of people based on their location or place of birth, culture can also include attitudes, values, beliefs, and certain behaviors from a group. A culture of a group can also be viewed as their way of public life, rituals, traditions, food, landmarks, the meaning of symbols and celebrations (Dingil et al., 2019, p.1). One of the most

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1. Power distance

2. Uncertainty avoidance

3. Individualism versus collectivism 4. Masculinity versus femineity 5. Long-term orientation

6. Indulgence

In this model, Power distance describes the distance between people with much power, compared to people with less power. In this context, the relationship between

employees and their managers are presented, including how they talk to each other and how they work together. High power distance means a big distance between the

managers and their employees. One example is that they will talk very processional to each other and use last names when addressing the other instead of talking casual using first names (Hofstede, 2011, p.9).

Uncertainty avoidance describes how willing the culture is to take a risk, a high uncertainty avoidance means that you are very risk-averse, while with a low score the culture is risk-taking. This is viewed as how willing the culture is to do risky business or act risky to get the chance to reach higher success (Hofstede, 2011, p.10).

Individualism versus collectivism describes if the culture mainly focuses and acts with the advantage of themselves or the group. An individual approach meaning that their own goals are the most important, while collectivism sees the group's goals as the most important (Hofstede, 2011, p.11).

Masculinity versus femineity describes if the culture is hard, result orientated, hardworking, or instead caring, polite and acceptable. Masculinity cultures are more goal orientated and dislike to show their feelings, while femininity cultures care for each other, help and act to reach goals instead of competing (Hofstede, 2011, p.12). Long term versus short term orientation shows where the focus of the group is if they want benefits right now or rather more benefits in the future. This is also showing if the culture thinks it is worth it to work hard for a long time to reach a big success,

compared to getting the benefit straight away (Hofstede, 2011, p.13).

Lastly, indulgence is described as the degree of socialization or control over impulses and desires available in society. This shows how willing the culture is to just enjoy life and have fun, compared to being serious most of the time. A lower level means less control over desires, and a higher level means more control and less socialization and enjoyment of life (Hofstede, 2011, p.15).

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makes people acceptable with taking risks both in their private life as well as at work. The level of Long-term orientation was measured to be quite neutral, which can be described with a focus both on long-term but also short-term. Lastly, Swedes tend to be very indulgent showing that the culture enjoys free time and having fun as a part of their everyday experience.

We decided to use Hofstede's model of cultures due to that it is one of the biggest and most famous models within the subject. When the Globe study (2008) also used these dimensions of culture as their framework that was proof that the model is still useful and ready to be implemented in different countries' cultures. But to extend the understanding of organizational culture and not only the national culture we also included several additional studies. Since all companies are operating within Sweden their culture will be influenced by the Swedish culture. Therefore, we have first presented the dimensions of the natural culture and will additionally move on to the organizational culture which is more specific for each organization within the country. An organization will hold both the national culture but also the organizational culture, which is not the same (Hofstede & Fink 2007 p. 15). Hofstede & Fink (2007, p.15) meant that organizational cultures are more based on sociology and are rooted in practices, compared to national cultures that are rooted in values. They are also arguing that organizational cultures for humans are easy to change, for example when one is moving to another organization. While changing the culture at a specific organization is almost impossible, and requires a lot of management, money, time and effort to even change slightly. Therefore, the most beneficial for an organization is if their culture goes in line with their values and beliefs. Furthermore, Hofstede (1998) defines that organizational culture is assumed to be a part of the whole organization and all its members, and not only the management and representatives of the organization. In the study, Hofstede (1998) presented six clear and mutually independent dimensions of organizational culture:

1. Process oriented vs. results oriented 2. Employee oriented vs. job oriented 3. Parochial vs. Professional

4. Open system vs. closed system 5. Loose vs. tight control

6. Normative vs. Pragmatic

Dimension 1 is explaining if the organization is focusing on processes such as going to your job every day and doing your job, without development or only putting a limited level of effort into the organization. While result orientated means that the workers feel comfortable in new situations, and every day they put in the maximal effort and time into the organization with the belief to reach the goal (Hofstede, 1998, p.3).

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cares about someone doing the job, and there is pressure that the job should be done, while the organization does not care about the individuals (Hofstede, 1998, p.3). Dimension 3 is the difference between employees that base their personal characteristics on the organizational characteristics, such as do not worry about the future since they assume that the organization will solve the problem for them. Compared to a

professional culture where the employees separate their work life with their private life, and they do think far ahead in the future based on their personal interests and not the organization's interests (Hofstede, 1998, p.4).

Dimension 4 describes open systems as an organization open to new members and ideas, where employees feel at home very fast. Compared to closed systems where people tend to be closed even to their own colleagues and are not open for new people to join the organization. In order to fit into the organization, you must be a specific type of person (Hofstede, 1998, p.4).

Dimension 5 refers to the amount of internal structure and control. In loose control, there can be a feeling that no one cares about costs, meetings are kept approximately short, and jokes and laughs about the company and the job are common. This is a freer place to work where managers care less about the preciseness of the employees, compared to tight control where the management has control over everything going on and the approach to the positions are more serious, for example, times are kept very closely, and no one is joking around.

Dimension 6 explains how normative business is where the major emphasis is on correctly followed organizational procedures, and that is more important than the result., and in matters of ethics and honesty unit standards are high. Compared to pragmatic where the business is market-driven, and the major emphasis is on meeting the customers' needs and the main focus is the result rather than the procedures. Even if the organization as a whole will have characteristics described by these

dimensions, it will also include cultural variety within the organization (Hofstede, 1998, p.11). This will be even more common in bigger and more complex organizations and are often known as subcultures. The culture dimensions were addressed with a focus on subcultures and it was clear that within the same organization different dimensions were presented based on departments and position within the company. This was earlier on also presented by Jones (1983) where he presented 3 main subcultures in the

organization, production culture, bureaucratic culture and professional culture. In his model, Hofstede‘s (1998, p.9) argued that his result fitted in too, including some extended dimensions.

Several studies have shown the importance and connection between organizational culture and sustainability. If the organization wants to act sustainable, the culture must benefit from such work. Linnenluecke & Griffiths (2010 p. 364) presented that

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sustainability information and research, can lead to the integration of sustainability for employees and a change in their values and beliefs, which additionally, in the long run, will lead to an adaption of the organizational culture. The importance is also highlighted to be on employee's engagement in sustainability and how that will lead to an integrated organizational culture with a focus on sustainability.

2.4.1 Change & resistance to change

Resistance to change can be a part of the organizational culture, as the cultural setting may be inhibiting or the driver of change. Research about organizations has been a focus of attention in the sustainability debate for some time, due to their possession of resources, technology and general ability to affect both consumers and society.

However, the organization's potential to act with an environmental focus and

sustainable intentions may be inhibited by internal structures, creating a resistance to change from within (Orji, 2018, p.102).

Barriers and resistance towards change hinder the implementation of sustainability initiatives and made efforts regarding organizational change management, and it is therefore important to recognize the barriers and drivers of sustainable performance for each specific organization (Orji, 2018, p.103). Organizational change regarding

sustainability can refer to the modification of traditional operations in a firm and its supply chains, to retain a more sustainable approach. By adopting sustainable

operations, the firm will need to have strategies to manufacture sustainable products and that has the capacity to create employment, community, product safety and other

associated benefits. By strategically developing new products and operations with multiple financial, social and environmental benefits, the organizational change will be more easily established and accepted (Orji, 2018, p. 103).

Part of the long-lasting organizational change towards sustainable operations includes managers identifying, analyzing and understanding the barriers and resistance towards sustainable performance. Therefore, we have included this resistance to change as a part of the analysis of sustainable leadership and the culture of the organization. This to identify the cultural issues that possibly hinder sustainability work.

Several theories introduce the importance of leadership and change as well as culture, this is explained by both Orji (2018) and Yukl (2002) for example. It can be relevant to assess a leader’s capacity to understand and handle these cultural issues, without

underestimating their influence. If assuming a proper solution and strategy to overcome the barriers, the organization have a better opportunity to incorporate sustainability and institutionalize it as part of their strategy (Orji, 2018, p.102). Yukl (2002, p.16)

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3. Methodology

3.1 Pre knowledge and choice of subject

The two authors of this paper are studying the international business program at Umeå University and are both in their 5th semester of the program. This paper is written as our bachelor thesis and undertakes 15 HP of the semester which is equal to half of the semester. The focus of this thesis will be management, which comes naturally since we before this studied Organizational Change C which is a management course. That gave us some valuable pre-knowledge about the subject along with a presentation of different theories used within the subject. Before that course, both authors have studied a

variation of subjects within the program such as business administration A & B,

statistics, Economy A, Basic law and Economic history. These courses give the authors some basic knowledge about the business subject in order to write this paper, as well as a variety of perspectives thanks to the previous studies. The course literature from our course Organizational Change C, Organizational Change by Senior and Swailes (2016) was also part of our inspiration for the choice of subject, as well as our chosen factors. This coursebook deals with change in organizations and introduces for example

leadership and culture as part of this. The literature search therefore partly started from this source of inspiration.

When thinking about our research question, the authors quickly decided to focus our paper on sustainability. This since both of us have an interest in sustainability, we wanted our paper to have a connection to the subject. Both the authors have also participated in the Sustainergies academy, which is a case-orientated education series where students get to meet companies and discuss cases focused on sustainability and CSR, also including workshops and lectures about sustainability. This has created both bits of knowledge about sustainability as well as different perspectives to use in this thesis. Sustainability is also a natural focus from the International Business Program where parts of sustainability are added to every course and the university as whole works with the 17 global goals from the united nations (Umu, 2020).

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3.2 Theoretical method

Our research philosophy and research approach should be included to incorporate a full understanding of our method. For this research philosophy, we will both use well-known and well-cited books as sources of information (Collins & Hussy, 2014;

Saunders et al., 2019; Bryman & Bell, 2015) as well as scientific journals. For example, by the well-cited authors on research methods, Guba and Lincoln (1994). The research philosophy refers to the system of beliefs and assumptions that creates the basis on which we acquire knowledge in a particular field. Our values and assumptions can influence the research process and how we understand and interpret the findings (Guba and Lincoln, 1994, p.107; Saunders et al., 2019, p.130-131). We will therefore include some assumptions about the two main ways of thinking regarding research philosophy, ontology and epistemology. This will help to provide validity and credibility to our research as it can enforce our methodological decisions and help create a coherent thesis where our research assumptions are constantly and purposely a vital part (Saunders et al., 2019, p.130-131).

3.2.1 Ontology

Ontology can be seen as a rather abstract concept, as the ontological assumption is related to how reality is perceived. It is relevant to include our perception of reality, as the ontological assumption impacts the way we as researchers study subjects and objects. Therefore, our way to see the specific world of management and business affects both our choice of study, and how we conduct it (Collins & Hussey, 2014, p.47; Saunders et al., 2019, p.133; Guba & Lincoln, 1994, p. 108).

Our way to see the specific world of management and business affects both our choice of studies and the way we conduct them. (Saunders et al., 2019, p. 133). The

interpretivist approach to the ontology assumption says that social reality can be

subjective and socially constructed. Each person that is interviewed may have their own sense of reality and this is therefore included as data in this thesis. This approach

includes the notion that there are several realities to consider, and as presented by Collins & Hussey (2014, p.47) and Guba & Lincoln (1994, p.110) this is one ontological assumption of reality.

Part of the ontological consideration is also the social ontology, which Saunders et al. and Bryman & Bell define as the nature of social entities, with two positions:

objectivism and subjectivism. Objectivism implies that social reality can be seen as objective and external to us and that it cannot be affected by our influence. (Saunders et al., 2019, p. 135-136; Bryman & Bell, 2016, p.35). Subjectivism contrastingly accepts that there are multiple realities for analyzing the world and social entities, and therefore incorporates the subjective perception and action of people. As our purpose is to

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from this study and reach deeper analysis and conclusions (Saunders et al., 2019, p. 135).

3.2.2 Epistemology

The epistemological assumption refers to what we as researchers accept as valid

knowledge in the subject that we are investigating (Collins & Hussey, 2014, p.47; Guba & Lincoln, 1994, p.108). The epistemological assumption refers to what we as

researchers accept as valid knowledge in the subject that we are investigating (Collins & Hussey, 2014, p.47; Guba & Lincoln, 1994, p.108). This assumption can then be

divided into either positivism or interpretivism, and researchers generally adopt one of these directions in the writing of their research (Collins & Hussey, 2014, p.47). Our epistemological perspective interpretivism created the basis of what we choose to investigate and our methodological decisions along the way.

This is how we landed on a qualitative study where we analyze data to identify themes within our chosen subject, the role of leadership, innovation and culture in the

sustainability work of Swedish heavy industry organizations. Interpretivism in research intends to create knowledge through rich insights and understandings by interpreting social constructions and individual circumstances. This to not generalize between situations, as this can diminish the understanding of the complexity of what is investigated (Saunders et al., 2019, p. 149). This is in line with what we aimed to research and how we wanted to conduct it, as sustainability problems are regarded as highly complex. Our purpose and qualitative data collection also made it necessary to analyze many aspects that are not very tangible, including values, attitudes and opinions.

The interpretivist approach includes a view that does not only regard measurable and observable data as valid, but that also considers that knowledge can come from subjective evidence from participants (Collins & Hussey, 2014, p.46). This study is conducted through interviews that are conducted and interpreted from an interpretivist paradigm. The interviews were developed from a framework developed from the literature, where data collection was aimed to not collect quantifiable data but qualitative insights and perspectives from the subjects. This is connected to an epistemological assumption of interpretivism (Collins & Hussey, 2014, p.134).

3.2.3 Axiology

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3.3 Theoretical approach

The view of the relationship between theory and research has been defined and divided into two main approaches; deduction, induction as well as an increasingly common combination of the two; abduction. This was defined by both Saunders et al. (2019, p.153), and Bryman & Bell (2015, p. 25-26). During our research process, an abductive approach was applied regarding our theory development method. The abductive

approach was defined by Saunders et al. (2019, p. 153) as the statement below

“Collecting data to explore a phenomenon, identify themes and explain patterns, to

generate a new or modify an existing theory which you subsequently test through additional data collection, you are using an abductive approach”

The abductive approach is a process where the theoretical framework is developed in a continuous process as the data collection is done and works like a mix between the deductive and inductive approach since it moves back and forth between theory and data. In this approach, theory can be developed and modified through the process as a complement to the data that is collected (Saunders et al., 2019, p.155-156). In the process, the theoretical chapter was continuously developed as the data analysis continued, to find a theoretical basis for the statements. This means that the collection and the development of the theoretical chapter were not limited to the start of the writing process, however, this was the main part. Through the themes that emerged from the thematic analysis, the theoretical chapter was continuously reviewed. This method is highly flexible and allowed us to create a continuous understanding of the innovation, culture and leadership and the role it has in sustainability work. Therefore, the analysis could be better and more relevant (Saunders et al., 2019, p.156-157).

3.4 Research method

This thesis data is collected in the form of qualitative data, which is described by Collis & Hussey (2014, p.130) as “normally transient, understood within context and usually

result in findings with a high degree of validity”. As Vaismoradi et al. (2015) described,

qualitative data is a group of approaches that is useful for collecting in-depth analysis and detailed interpretations of a topic. This selected method was used as it is appropriate in collecting primary research data through for example interviews. Conducting

qualitative interviews with appropriate respondents allows us access to knowledge that will allow us to fulfill the purpose – to reach a deeper understanding of leadership, innovation and culture in Swedish heavy industry organizations.

Qualitative data is described by Dalen (2015) to have an interpreting approach to the data, meaning that both readers and the authors will create their own social reality and when reading the data, involving their personal experiences and interpretation.

Therefore, the reality created from the data will not be the same for everyone, but rather multifaceted (Dalen, 2015, p.18). This is appropriate according to the research

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In this research, we used verbal data as defined by Saunders et al. in the form of speech through the conducted interviews. This data collection was done to collect qualitative data through interviews that provided descriptive and explanatory perspectives, that we could use for analysis of the subject (2019, p.638). Saunders et al. define some key aspects to consider when choosing to do qualitative research, including the

methodological and philosophical basis of the research and our adopted approach to theory development which can then conclude to the chosen analytical approach. We have already defined our philosophical research approach, and an analytical focus was incorporated in the analysis of the results (Saunders et al., 2019, p.642-643).

Before executing the interviews, in order to understand the data given by the

interviewees correctly, contextualization as forms of background information is needed (Collis & Hussey 2014, p.130). This was done in the form of a theoretical framework as well as studying the companies through the information available online. The authors also, before the interview, made sure we knew the basic information about our

interviewee such as job title, age and what company they work at. This was done to be able to ask follow-up questions and engage in the discussion in a better way (Cassell, 2015, p. 7).

3.4.1 Interview structure

When collecting the data, we performed interviews in order to get our selected interviewees' options knowledge and thoughts about the subject. The structure of the interviews was semi-structured, meaning we prepared questions beforehand but was open and flexible when it came to follow-up questions (Collis & Hussey 2014, p.134). The main part consisted of open questions, explained as questions where the answer in describing and not only yes or no (Collis & Hussey 2014, p.133). This allows the interviewee to “keep talking” rather than closing off their discussions and possible answers (Cassell, 2015, p. 6). Even if there were mostly open questions used in the interviews, closed questions were also a part of the interviews with the aim to get shorter and more concrete answers. This is especially represented in the background questions where the aim was to get to know the interviewee and the organization. Open questions take longer to answers which leads to fewer questions presented, as well as making sure we had enough time distributed for each interview.

The reason for us choosing to perform semi-structured interviews is that we want the interview-form to be flexible enough to ask follow-up questions to make sure we receive all needed information and do not need to perform a second interview. We beforehand prepared possible follow-up questions to every stated question, this to be as prepared as possible. We think this could help us to use follow-up questions at the right time and purpose, and by that get as much and as useful information from the

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Our interviews started with easy answered questions in order to make the respondent calm and comfortable in the situation as recommended by previous literature (Dalen, 2015, p. 35; Cassell, 2015, p. 6). These questions can be answered without deep reflection or thinking from the interviewee and are asked to encourage the interviewee to start talking and getting on track (Cassell, 2015, p. 6). After having an easy start-up, we moved more closely to the central and most important questions of the interview. By doing so Dalen (2015, p.35) states that the interviewee will be more willing to be honest when answering the more in-depth questions.

Since the aim of this study was to perform personal interviews providing a lot of information, we were focusing on quality over quantity, and are not performing more interviews than needed in order to answer the research question. This gave us more time to focus on each interview and be better prepared compared to what we would have with a higher number of interviews. Also, limitations in time resulted in this decision. All the interviews were done individually, meaning we were talking to one interviewee at a time. This was done with the aim to create a personal connection to the interviewee and for him/her to feel comfortable enough to tell us personal thoughts and experiences. This also reduces the risk of the interviewees getting affected by each other's opinions or examples (Cassell, 2015, chapter 2, p. 8). The approach used makes the interviewee comfortable enough to answer the questions honestly without someone else such as a colleague in the same room (Cassell, 2015, p. 8) Both authors participate in all the interviews giving us the chance to help each other. Furthermore, all interviews were recorded with permission from the respondents. This was done to create the possibility of watching the interviews again, as well as to transcribe the interviews afterward instead of taking notes during the interview. (Collis & Hussey 2014, p.136). Figure 1 further illustrates the entire interview process.

Figure 1. The interview process

3.4.2 Practical collection of data

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When performing interviews using online tools it is important to make sure the technology is working as well as having a back-up plan in case of a failed connection. Therefore, the online tool Teams were used since the authors were previously familiar with it. As a backup, regular phone interviews were planned (Cassell, 2015, p. 3)

3.4.3 Recording & transcribing of interviews

As emphasized, with acceptance from the interviewees all the interviews were recorded. All recording of the interviewees was done directly in Teams using their tool for

recording, which will both be recording the sound but also the video. The authors are familiar with this technique and therefore also trust it to record with good quality. Bryman and Bell (2011, p. 482) state that by recording interviews the interviewer can be more alert and able to ask follow-up questions than if instead of focusing on taking notes, this is extra important for us since none of the authors are experienced when it comes to performing interviews. The recordings could also be repeatably watched, for easier interpretation and analysis (Bryman & Bell, 2011, p. 482).

Furthermore, the authors transcribed the interviews for a closer study (Bailey, 2008, p.127). The transcription made us go through the material once again and will therefore be more of “an interpretive act rather than simply a technological process” (Bailey, 2008, p. 130). By doing this it was also easier for us to view patterns among the

different interviews. Since the interviews will be performed in Swedish the transcription will also be done in Swedish, more language information will be provided in the next chapter. All interviews and their length are presented in table 1.

3.4.4 Interview language

The interviews were performed in Swedish since that is the first language of both the authors and all the respondents. This decision was taken to avoid miscommunications or anyone participating feeling uncomfortable or limited due to the language. To perform interviews in another language that the thesis language creates a need for a translation of both interview questions and answers after the finished interviews. A risk created by this is that some terms will not have the same meaning in Swedish and English (Cassell, 2015, chapter 3, p. 12). There can also be issues around the culture of a used language when that language is removed and translated (Cassell, 2015, chapter 3, p. 12).

The interview-guide is presented in both Swedish and English (See Appendix 1 & 2) for the reader to read it from the perspective and language they prefer, and to openly show the possible downsides of our translation. Where quotas are used in the result they are written in English with a translation as close as possible to the Swedish words said by the respondent. However, the authors are aware that this type of translation comes with downsides but has nevertheless chosen to perform our interviews in Swedish with the main reason to make our interviewees feel as comfortable and talkative and possible, along with making the conversation feel natural and relaxed. This decision was also taken to reduce the risk that interviewees choose the wrong explanatory words due to language restrictions.

3.4.5 Selection criteria for interviewees

EASY AS ONE

EASY AS ONE

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TWO

-THREE?

A qualitative study on three

factors that affect sustainability

in

heavy industry organizations

Abstract

Acknowledgements

Molly Stocksén

Table of contents

List of figures

1. Introduction

2. Theory

3. Methodology